Vishy Padmanabhan: Why a Two-Speed IT Model Is Off Track

To keep up with growing consumer demands for innovative products and services, digital leaders are looking beyond two-track IT to more scalable solutions. Vishy Padmanabhan, a partner in Bain's Information Technology practice, discusses how committing to a full transformation can bring an entire organization up to speed and create enduring benefits.

VISHY PADMANABHAN: Companies across industries are looking to enhance their technology effectiveness and operate more like digital natives. Now, their customers are asking them to deliver products faster and deliver continuous innovation. But we know many companies struggle with this. They're stifled by existing ways of working and outdated technology architectures.

There have been concepts like two-speed IT and two-track IT that people have experimented with with the hope that they will get better outcomes. But what happens practically is that there are more downsides than upsides. While these concepts may work in specific situations, they are really not scalable for the whole of IT.

What we really see working with clients who have tried these approaches is that number one, there's a cultural tension between the organization that is working on the old systems and the organization that is building new, cool digital applications.

Secondly, it creates unnecessary cost and complexity in the long run, because you end up creating a lot of overlap and redundancy.

And finally, it's very hard to explain to the business why one part of the organization is able to deliver fast while the other one is going really slowly. And we saw this come alive in a financial institution who was trying to implement this sort of an approach. And they really couldn't get the full benefit.

What we are seeing is digital leaders in many industries are trying a very different approach. They are essentially committing to a transformation, and they are articulating a future state where the whole of IT is going to work in a very different way by embracing modern development principles, Agile methodologies, product models, etc.

Now, they don't try and do everything all at once. They build a management commitment, but then they take a domain, they execute this plan within the domain, and once that works, they learn from it. And then they scale it to the rest of the organization. And we have worked with clients both in banking, in retail, and several other sectors, who have taken this approach and they have scaled this to the whole organization.

Now, we think this is a much more inspiring way of executing a transformation. And quite frankly, we think this is more enduring because you're not leaving an army of an organization behind. You're taking the whole organization with you, and you are transforming the whole IT organization.